Sec. 5. Phasedown of regulated substances
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The baseline for the phasedown of the production of regulated substances shall be the sum of— the sum of the products of— the average annual production in the United States of each regulated substance during the 3-year period of calendar years 2011, 2012, and 2013; multiplied by the respective exchange value of each regulated substance; an amount equal to 15 percent of the sum of the products of— the average production in the United States of each hydrochlorofluorocarbon in 1989; multiplied by the respective exchange value of each such hydrochlorofluorocarbon; and an amount equal to 0.42 percent of the sum of the products of— the average production in the United States of each chlorofluorocarbon in 1989; multiplied by the respective exchange value of each such chlorofluorocarbon.
The baseline for the phasedown of the consumption of regulated substances shall be the sum of— an amount equal to the sum of the products of— the average annual consumption in the United States of each regulated substance during the 3-year period of calendar years 2011, 2012, and 2013; multiplied by the respective exchange value of each such regulated substance; an amount equal to 15 percent of the sum of the products of— the average consumption in the United States of each hydrochlorofluorocarbon in 1989; multiplied by the respective exchange value of each such hydrochlorofluorocarbon; and an amount equal to 0.42 percent of the sum of the products of— the average consumption in the United States of each chlorofluorocarbon in 1989; multiplied by the respective exchange value of each such chlorofluorocarbon.
For purposes of paragraphs
(1)and (2), the following exchange values for hydrochlorofluorocarbons and chlorofluorocarbons respectively shall apply: Table 2 Chemical Name Common Name Exchange Value CHFCl 2 HCFC-21 151 CHF 2 Cl HCFC-22 1810 C 2 HF 3 Cl 2 HCFC-123 77 C 2 HF 4 Cl HCFC-124 609 CH 3 CFCl 2 HCFC-141b 725 CH 3 CF 2 Cl HCFC-142b 2310 CF 3 CF 2 CHCl 2 HCFC-225ca 122 CF 2 ClCF 2 CHClF HCFC-225cb 595 Table 3 Chemical Name Common Name Exchange Value CFCl 3 CFC-11 4750 CF 2 Cl 2 CFC-12 10900 C 2 F 3 Cl 3 CFC-113 6130 C 2 F 4 Cl 2 CFC-114 10000 C 2 F 5 Cl CFC-115 7370 The Administrator shall, by regulation, establish an allowance allocation and trading program to phase down the production and the consumption of regulated substances in accordance with this section. Not later than 270 days after the date of enactment of this Act, the Administrator shall promulgate such final regulations as may be necessary to establish the program required by the preceding sentence. Not later than October 1 of each calendar year following the promulgation of final regulations pursuant to the second sentence of paragraph (1): The Administrator shall establish a quantity of production allowances and a quantity of consumption allowances. The quantities established pursuant to this paragraph shall not exceed the applicable percentages of the production baseline and of the consumption baseline for the calendar year involved as specified in the following table 4: Table 4 Calendar year Percentage of Production Baseline Percentage of Consumption Baseline through 2023 90% 90% 2024 through 2028 60% 60% 2029 through 2033 30% 30% 2034 through 2035 20% 20% 2036 and subsequent years 15% 15% The Administrator shall, by regulation, allocate such production allowances and consumption allowances up to the quantities of such allowances established pursuant to this paragraph for the succeeding calendar year. The Administrator may, at the Administrator’s discretion, so allocate allowances through a single rulemaking for multiple succeeding calendar years. Effective January 1 of the calendar year immediately following the issuance of a final regulation pursuant to the second sentence of paragraph (1), it shall be unlawful for a person to do any of the following: Production of a regulated substance without holding a production allowance that authorizes such production. Consumption of a regulated substance without holding a consumption allowance that authorizes such consumption. Holding, using, or transferring any production allowance or consumption allowance allocated under this section, except in accordance with regulations promulgated by the Administrator pursuant to paragraphs
(1)and (2). An allowance does not constitute a property right. Nothing in this Act or in any other provision of law shall be construed to limit the authority of the United States to terminate or limit the authorization for the production or consumption of a regulated substance, as applicable, granted by the allowance. For each year listed in table 4, the Administrator shall ensure that the annual quantity of production or consumption in the United States of all regulated substances does not exceed the product obtained by multiplying the production baseline or consumption baseline, as applicable, and the applicable percentage listed in Table 4. The regulations required by subsection (b)(1) shall— utilize the exchange values for each regulated substance by or pursuant to section 3; ensure that transfers of production allowances and consumption allowances will result in greater total reductions in the annual production or consumption, as applicable, of regulated substances than would occur in that year in the absence of such transfers; and authorize the transfer of production allowances or consumption allowances among two or more persons only if the transferor and transferee are subject to an enforceable and quantifiable reduction in, respectively, annual production or consumption. Subject to paragraph (3), the Administrator may, in response to a petition submitted to the Administrator in accordance with paragraph (2), promulgate regulations which establish a schedule for phasing down the production and the consumption of regulated substances that is more stringent than set forth in table 4 in subsection (b), if, based on the availability of substitutes for regulated substances, the Administrator determines that such more stringent schedule is practicable, taking into account technological achievability, commercial demands, safety, and other relevant factors, including the quantities of regulated substances available from reclaiming or from prior production or prior import. In any regulations under subparagraph (A), the Administrator shall apply any more stringent phasedown schedule uniformly to the allocation of production allowances and consumption allowances as provided under subsection (b). Any person may petition the Administrator to promulgate regulations under this subsection. The Administrator shall grant or deny any petition under subparagraph
(A)within 270 days after receipt of any such petition. If the Administrator denies any such petition, the Administrator shall publish in the Federal Register an explanation of why the petition was denied. If the Administrator grants any such petition, the Administrator shall promulgate regulations implementing a more stringent phasedown schedule within 365 days of granting the petition. Any petition under subparagraph
(A)shall include a showing by the petitioner that there are adequate data to support the petition. If the Administrator determines that data are not adequate to grant or deny the petition, the Administrator shall use any authority available to the Administrator, under any applicable law, to acquire such data. The Administrator may not promulgate a more stringent phasedown schedule under this subsection applicable to any calendar year prior to calendar year 2024. The Administrator may, by regulation, allocate to a person additional production allowances or consumption allowances to authorize the production or consumption, respectively, beginning with calendar year 2034, for a period of up to 5 years, of a regulated substance in an amount up to 10 percent of the quantity of production or consumption of such regulated substance contributed by such person to the production baseline or the consumption baseline, as applicable, if the Administrator finds, based on a petition by such person, that— such excess production or consumption is exclusively for an application with respect to which no substitute is available during such period, considering technological achievability, commercial demands, safety, and other relevant factors; and the available supply of such regulated substance, including any quantities of such regulated substance available from reclaiming, prior production, or prior import, and allowances for such regulated substance, are insufficient to accommodate such application. The Administrator may, by regulation, allocate additional production allowances or consumption allowances, for additional periods of up to 5 years, in an amount up to 10 percent of the quantity of production or consumption of the regulated substance contributed by the person involved to the production baseline or the consumption baseline, as applicable, if the Administrator finds, based on a petition by such person, that the criteria described in subparagraphs
(A)and
(B)of paragraph
(1)continue to be satisfied. The Administrator may allocate production allowances or consumption allowances pursuant to this subsection in amounts that cause the total quantity of production allowances or consumption allowances in a year to exceed the maximum quantity permissible under subsection
(b)for that year. Subject to subparagraphs
(B)and
(C)and paragraph (2), the Administrator may, by regulation, issue additional production allowances for renewable periods of up to 5 years to a person to produce a regulated substance at a facility located in the United States in excess of the amount authorized by the production allowances otherwise held by that person solely for export to, and use in, a foreign country. Prior to issuing any additional production allowances to a person pursuant to subparagraph (A), the Administrator shall require the person to submit a petition in such manner and containing such information as the Administration may by regulation require. The Administrator shall not issue any production allowances pursuant to subparagraph
(A)in amounts that would cause the total quantity of production allowances in a year to exceed the maximum quantity of production allowances permissible under subsection
(b)for that year. Beginning on January 1, 2033, no person subject to the requirements of this Act shall export a regulated substance to a foreign country that is not identified by the Administrator as having enacted or otherwise established the same or similar requirements or otherwise undertaken commitments regarding the production and the consumption of regulated substances as are contained in this Act.